County Council facing a budget deficit of over €20m due to Covid-19 crisis

CORK County Council is facing a precarious financial position with an estimate budget deficit of between €23m to €30m that could take the local authority five to six years to recover from.

At a meeting of the local authority last week, chief executive Tim Lucey described the figures as  ‘pretty stark’ and not to be underestimated as the Council tries to come out of the post Covid-19 lockdown.

Head of finance, Lorraine Lynch, who outlined the financial situation to councillors, said their rates income has been severely impacted by the impact of Covid-19 with reductions of up to €20m. She said that they have estimated that there will be a reduction of 54% of rate income for the Council.

‘There’s a current rates waiver at the moment for three months until June 27th but some businesses may not be able to open, or will open on a phased basis, and this will impact on our ability to collect rates as well as their ability to pay them,’ said Ms Lynch.She said that goods and services account for €106m of the county’s income and she has estimated that parking fines and charges have an estimated loss of €1m, while leisure and tourism facilities also have an estimated loss of €1m. The overall estimated loss of income is between €6m to €8m and the 2020 budget is already being balanced with €2.3m for reserves of €7.3m.

Some services could also be impacted due to the deficit.

‘If we have a deficit we’ll have to claw it back and without national funding we will have a serious deficit. We just don’t know what our income will be for 2020,’ said Ms Lynch.

Cllr Alan Coleman (Ind) said it was the ‘most sobering’ financial report he’s seen since becoming a county councillor.

‘To face into next year with no reserves and a deficit is a frightening scenario and it’s hitting Cork County Council very hard.

‘We need to use all political power to make sure the local authority is supported,’ said Cllr Coleman.

Cllr Seamus McGrath (FF) said it is important that the public are aware of the ‘grave financial’ situation facing the Council and that it is quite clear that local authorities across the country are going to need greater support.

His colleague, Cllr Gillian Coughlan described the report as ‘sobering’ and echoed his call to write to the Government requesting financial support. But she also said they need to lobby hard at an EU level setting out their deficit and where the expenses were incurred.

‘It’s simply asking for money and there’s no need to beat around the bush. We have incurred expenses, now is the time to actually ask and the evidence and report is there. We should strive ahead for financial support in the very short term,’ said Cllr Coughlan